Lawmakers aims to 'help' Utahns pay tax on Internet sales

SALT LAKE CITY — Utah could become more vigilant about collecting sales tax on purchases over the Internet.

Rep. Wayne Harper, R-West Jordan, intends to propose two bills to see that Utahns "do what they're already supposed to do" when buying things online.

Speaking at the Utah Taxpayers Association pre-legislative conference, Harper said he wants to help residents comply with state law, which requires the value of out-of-state purchases to be reported on state income tax returns and pay the state sales tax for those purchases.

The Utah Legislature's 2012 session begins next Monday.

One of Harper's bills would require online retailers to notify buyers that they have an obligation to report the purchase on their tax return if the sale occurs in Utah. The other bill would assist people in remitting the sales tax at the time of purchase.

Overstock.com general counsel Mark J. Griffin spoke against the bills.

Griffin said it's difficult for Internet companies to figure out and apply local tax laws, noting there are 10,000 taxing districts across the country. Also, each state categorizes items differently for taxing purposes and some states authorize sales tax holidays at certain times of year, he said.

"When we pass these laws, we don't think about implementation," he said.

Having to notify buyers of their tax obligation interrupts the flow of a transaction, Griffin said. If people have to entertain more information, they're less likely to buy, he said.

Griffin said rather than states passing their own laws regarding online sales tax, there needs to be a federal solution.

— Dennis Romboy, Twitter: dennisromboy